First Data 2008 Annual Report Download - page 183

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2009 Segment Reorganization
Effective January 1, 2009, the CODM further re-aligned the business and began making strategic and operating decisions with regards to assessing
performance and allocating resources based on a new segment structure. FDC will operate in four business segments in 2009: Retail and Alliance Services,
Financial Services, International and IPS. The most significant changes are check verification, settlement and guarantee services moving from the Financial
Services segment into the Retail and Alliance Services segment as well as the Prepaid Services segment moving into the Retail and Alliance Services
segment. A summary of how the new segments are structured follows:
Segment Description
Retail and
Alliance
Services
Comprised of businesses that provide services which facilitate the merchants' ability to accept credit, debit, stored-value and loyalty cards and
checks. The segment's merchant processing and acquiring services include authorization, transaction capture, settlement, chargeback handling
and internet-based transaction processing. Retail and Alliance Services also provides point-of-sale ("POS") solutions and other equipment
necessary to capture merchant transactions. A majority of these services pertain to transactions in which consumer payments to merchants are
made through a card association (such as Visa or MasterCard), a debit network, or another payment network (such as Discover). In addition,
Retail and Alliance Services provides check verification, settlement and guarantee services and a wide range of open and closed loop stored-
value products and processing services. The closed loop operations provide gift card processing services to large national merchants as well as
fleet services to trucking companies. The open loop operation is driven primarily by employers' adoption of the Money Network payroll
product and general purpose reloadable card programs.
Financial
Services
Provides issuer card and network solutions and payment management solutions for recurring bill payments. Financial Services also offers
services to improve customer communications, billing, online banking and consumer bill payment. Issuer card and network solutions includes
credit, debit and retail card processing, debit network services (including the STAR Network and ATM processing) and output services for
financial institutions and other organizations offering credit cards, debit cards and retail private label cards to consumers and businesses to
manage customer accounts. The segment's largest components of revenue will consist of fees for account management, transaction
authorization and posting, and network switching as well as reimbursable postage.
International Comprised of businesses that provide the following services outside of the U.S.: credit, retail, debit and prepaid card processing; merchant
acquiring and processing; ATM and POS processing, driving, acquiring and switching services; and card processing software. The largest
components of the segment's revenue are fees for facilitating the merchants' ability to accept credit, retail and debit cards by authorizing,
capturing, and settling merchants' credit, retail, debit, stored-value and loyalty card transactions as well as for transaction authorization and
posting, network switching and account management.
Integrated
Payment
Systems
Includes the issuance of official checks which are sold by agents that are financial institutions and the issuance of money orders which are
sold by agents that are financial institutions and retail businesses. Official checks serve as an alternative to a bank's own items such as cashiers
or bank checks. Money orders serve as a disbursement option for a consumer or business. Revenue is principally earned on invested funds
which are pending settlement. The official check and money order businesses are conducted by a subsidiary of the Company, Integrated
Payment Systems Inc., that is licensed to offer payment services that fall under state and federal regulations. This segment is in the process of
winding down its official check and money order businesses.
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